Chinese State Media Continue Attack on Apple

HONG KONG -- China's press campaign against Apple continued unabated Wednesday, as the country's premier state media outlet, the People's Daily, ran a front page op-ed piece attacking the company’s “arrogance” toward the Chinese market. This latest condemnation follows the paper's front-page piece from Monday that called Apple an “empty and self-praising” brand.

Titled “Defeat Apple’s ‘Incomparable’ Arrogance” -- the quoted "incomparable" a disparaging reference to how Apple described its customer service in China in a statement Saturday – the People’s Daily article censured the company for “ignoring Chinese consumers, substandard customer service, suspected tax evasion and a steadfast refusal to admit wrongdoing when it’s caught out.”

Claiming the Chinese market contributed $7.3 billion to Apple’s coffers during the previous quarter, and that the country’s consumers made up 34 percent of the company's increase in revenue in December, the spot said China “should be regarded as Apple’s main financial backer. … It’s the Chinese market which propped up the brand’s remarkable results.”

The emphasis Beijing authorities have placed on this campaign against Apple is demonstrated by the prominence given to these articles in the state press. While People’s Daily has now twice given the issue front-page treatment, the state-backed Xinhua News Agency also carried the latest article, and then spun off a string of related stories on the topic -- a move which actually cast coverage of new president Xi Jinping’s first official visits abroad into the paper’s margins.

This attack is just the latest assault on Apple since state broadcaster China Central Television opened the anti-Apple floodgates on March 15, when the broadcaster’s annual consumers’ rights show 3.15 aired complaints about Apple's post-sale services and policies in China. The program claimed the company doesn't follow a local law requiring a two-year warranty for electronics (Apple offers just one), and questioned why Chinese consumers returning malfunctioning smartphones during the one-year period are issued refurbished products, rather than brand-new replacements (which the company offers in other markets).

The show generated heated debate in the Chinese blogosphere, with posts flying in from around the country either attacking or defending the celebrated Cupertino-based brand. While some of these comments might have been volunteered by genuinely agitated consumers, a carefully orchestrated social media campaign from CCTV was laid bare when actor Peter Ho’s tweet against Apple on Chinese social networking site Weibo ended with the phrase “Post around 8.20.” Some took this as a sign of Ho actually sending in a comment for an assistant to post – most read it as instructions of what to tweet from CCTV or parties unknown. Ho soon claimed that his account had been hacked -- and was widely disparaged by Chinese social media users. Comments posted with the #PostAround8:20 hashtag were removed by Weibo’s censors – a move that furthered the belief that Ho’s post was simply part of an officially endorsed move to support CCTV’s critique of Apple.

The so-called “Ho-gate” has since proved to be just one episode in Chinese state media’s attacks on Apple’s business in the country. Last Thursday, a story in state outlet Xinhua reported that 20,000 students in the city of Wuhan have taken out high-interest loans to buy high-end electronic products. The headline? “Apple Pursuit Lures 20,000 Students into Usury.”

On Saturday, Apple finally responded to CCTV’s charges with a statement claiming that “Apple’s Chinese warranty is more or less the same as in the U.S. and all over the world” -- a remark that fueled an even more critical response from the People’s Daily, which described the brand as offering an “empty and self-praising defense.” Then the op-ed piece on Wednesday ratcheted up the rhetoric, saying that the company is trying to exploit Chinese consumers with “a Western superiority complex.”

Many analysts have interpreted this attack on Apple as just the latest manifestation of an ongoing official strategy aimed at preventing foreign businesses from storming the rapidly expanding middle-class Chinese consumer market.

In August, China’s chief film regulator Zhang Pimin publicly denounced Hollywood studios for trying to exploit the higher profit-margins accorded to China-U.S. co-productions by weaving token China-set scenes and Chinese characters into films -- a remark that generated much anxiety among American producers about their China plans.

While the latest People’s Daily article leads with criticism against Apple, the piece goes on to discuss how the country must erect considerable mechanisms to regulate the practices of foreign businesses and protect its own consumers -- and its own domestic producers of consumer goods.

As many analysts have been quick to point out, the timing of the Chinese state media’s anti-Apple tirade comes just as domestic Chinese tech companies, such as Lenovo and TCL, are attempting to position themselves as high-quality, exportable brands -- TCL’s $5 million, 10-year branding deal with the Chinese Theater in Hollywood is just one move in this ongoing international push.

The broadside against Apple, one of the single most popular foreign brands in China, comes at a time of budding state media enthusiasm over a surge in profits for domestic products -- such as the record-breaking runs of Chinese films, Lost in Thailand and Journey to the West: Conquering the Demons -- and a new-found sense of pride for some local brands and leaders, particularly new First Lady, Peng Liyuan, whose widely praised fashion choices have been the work of domestic Chinese designers. This mounting criticism of dominant foreign multinationals and the wellspring of enthusiasm for all things homegrown, are likely just a precursor to the media wars to come, as China attempts to find its footing as a producer of brands and cultural products that can compete with the West.